Inchcape Volkswagen Chester Jun 2018Inchcape Volkswagen Chester Jun 2018


Inchcape predicted value increased by experts after first-quarter results are better than expected

  • Intrinsic value could reach 1,045.5p per share by 2024
  • Caution sounded over new car supply constraints
  • Company has outperformed FTSE 250 by 11.5 per cent so far this year

Time 6 months ago

Inchcape’s better-than-expected results for the first quarter have led to financial experts increasing their predicted value of the company.

Reported group revenue rose by two per cent on an organic basis, with distribution revenue up by four per cent year on year, again on an organic basis.

That followed the news that Inchcape was offloading some of its Russian dealership operations for £70m as it looked to increase its focus on distribution, which was 40.5 per cent of revenue in 2011, said Zeus Capital, and is now 61.2 per cent based on Zeus’s 2021 forecasts.


Mike Allen, research analyst at the investment banking operation, said: ‘We have updated our forecasts accordingly and our intrinsic value increases to 1,045.5p.’

That’s 33.8 per cent up on its share price at the time of the forecast being produced, and which Zeus Capital said it believed was achievable within three years. It was tempered, though, with caution caused by supply constraints in the new car market.

Allen added: ‘Due to the fragmentation of the distribution market, Inchcape has plenty of acquisition opportunities that it could pursue to achieve significant long-term earnings growth.’

Inchcape, which will announce its interim results on July 29, has outperformed the FTSE 250 by 11.5 per cent during the year to date, said Allen.

Estimated revenue for 2021 has been revised upwards from £7.165bn to £7.174bn, while estimated pre-tax profit is similarly expected to be better, rising from £2o9.2m to £211.6m. Estimated EBITDA is £376.6m.

Distribution success helps Inchcape off-set losses in car dealerships around the world

Inchcape agrees sale of Russian dealerships for £70m to further focus on distribution

John Bowman's avatar

John has been with Car Dealer since 2013 after spending 25 years in the newspaper industry as a reporter then a sub-editor/assistant chief sub-editor on regional and national titles. John is chief sub-editor in the editorial department, working on Car Dealer, as well as handling social media.

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